Trump casts shadow over IMF meetings

The Trump administration had a simple but stark message for world financial leaders who gathered in Washington amid worries about rising US protectionism: fair trade means tit-for-tat tariffs.

Speaking to bankers just hours after the formal start of the International Monetary Fund and World Bank spring meetings on Thursday, White House National Economic Council Director Gary Cohn said Washington was prepared to get tougher in the trade arena.

“If you want to insist on having a tariff on a product – which we prefer you not – the president believes that we should treat you in a reciprocal fashion and that we should tax your product coming into the United States,” Cohn said. “That is free, that is open, and that is fair.”

Asked at the Institute of International Finance about his message for his international counterparts, Cohn said the United States doesn’t want to be “taken advantage of” any more.

“The message is simple. We care about the United States of America, we care about economic prosperity, we care about economic growth, we care about trade, we care about being treated fairly,” he said.

Earlier at the White House, President Donald Trump signed a directive to study whether steel imports into the US should be restricted for national security reasons under a law passed in 1962.

Such moves, including a review of “Buy American” rules launched earlier this week, have raised concerns that the Trump administration is looking outside the World Trade Organisation for remedies to restrict US imports.

IMF Managing Director Christine Lagarde told reporters that more needed to be done to make the global trading system fairer and expressed a willingness to work with Trump to do just that.

In a news conference, Lagarde said there was a need to improve the WTO dispute settlement rules as well as reduce government subsidies for industry and tackle other trade distortions.

She said the IMF would do its part in working to cut government subsidies for industry and other trade practices that limit competition, but said “protectionist measures” needed to be avoided.